What to look out for in the European Central Bank's meeting

FILE - This Thursday, March 10, 2016 file photo shows, President of the European Central Bank, Mario Draghi, speaking during a press conference following a meeting of the governing council in Frankfurt, Germany. European Central Bank head Draghi is likely to underline Thursday, April 21, 2016, at his news conference, that monetary stimulus is working and that more is available if needed. (AP Photo/Michael Probst, File)
(The Associated Press)

FRANKFURT, Germany – Europe's big dose of economic stimulus medicine is working — and if somehow it isn't, there's more available.

That's the message European Central Bank President Mario Draghi will deliver Thursday at his news conference after the bank's governing council meets, analysts say.

With economic growth still relatively weak and inflation nonexistent, Draghi will be keen to convince investors that the ECB has not run out of ammunition to support the 19-country eurozone.

Here are key themes to watch for.

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HIT PAUSE

The central bank for the 19-country eurozone is likely to hold back on more stimulus after delivering a range of measures at the March 10 meeting of its 25-member council.

Back then, the ECB scaled up its monthly bond-buying program, which is meant to boost lending and inflation, and cut its benchmark interest rate to zero. It also increased the penalty rate banks must pay on money they leave unused at the ECB instead of lending.

The ECB will likely want to see how that additional dose of stimulus works before committing to more, even though indicators of economic growth remain relatively subdued.

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MORE WHERE THAT CAME FROM

Analysts say Draghi will keep the door open to doing even more of the extraordinary monetary stimulus the bank has deployed to try to raise inflation and boost growth. The question is what that stimulus might look like.

The ECB is already injecting 80 billion euros ($91 billion) a month in newly printed money into the banking system by purchasing bonds from banks. The hope is, banks flush with cash will lend at lower rates, leading to more borrowing and higher inflation and growth.

The ECB policies have helped drive many market interest rates to freakishly low levels. German two-year bonds, for instance, yield minus 0.5 percent, meaning anyone who buys one pays the German government to lend it money.

So far, however, success in raising inflation toward the bank's goal of just under 2 percent is slow in coming. Inflation remains at zero.

One possibility is that the ECB could decide later this year to extend those bond purchases beyond the current duration of at least until September 2017. Economists have raised the idea of so-called "helicopter money" — printing money and distributing it to consumers, instead of channeling it through banks using bond purchases.

But that would be an extreme step and could face legal obstacles for the ECB.

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THE ECONOMY

In the absence of any policy promises, Draghi's views of the economy will be a focus for investors.

The eurozone economy, by some measures the world's second-biggest after the U.S., is enjoying a modest upswing. And the ECB is probably pleased with figures last week showing credit conditions loosening for businesses — a key goal of its efforts.

But don't be surprised if Draghi is a little downbeat, emphasizing that the current recovery could easily go off the rails due to global risks such as a downturn in China.

Being a little gloomy is one way to reassure investors that the ECB could still provide more stimulus.

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BANKS

Draghi may also address worries about the ability of banks to handle the sub-zero interest rates.

Banks have to pay 0.4 percent on excess cash they deposit at the central bank. The measure is meant to spur them to lend but squeezes earnings. To help offset the penalty rate, the ECB is planning to offer more cheap loans to banks, under which it would pay them to take the money.

Italy has been a recent focus of worries about banks after it set up a private investment fund to try to help troubled banks raise more capital and sell off bad loans.

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GERMAN CRITICISM

Draghi may take the opportunity to stress the ECB's legal independence to German officials, who have recently been critical of the ECB's stimulus measures. The EU treaty forbids the bank from taking advice from politicians, and underlines that governments agree to respect that principle.

That hasn't stopped conservative German politicians from complaining that the ECB's low interest rate policy is hurting savers and making it harder to invest for retirement. Finance Minister Wolfgang Schaeuble even blamed ECB policies for fueling the rise of the right-wing, anti-euro Alternative for Germany party.